U.S. railroads warn of system disruptions over safety deadline

WASHINGTON (Reuters) - Major U.S. and Canadian railroads stepped up pressure on Congress to extend a Dec. 31 deadline for new safety technology on Wednesday, warning that failure to act would lead to crippling disruptions across the national freight and passenger rail system.

In separate Sept. 9-dated letters sent to the Senate Commerce Committee, BNSF Railway Co, Norfolk Southern Corp and Canadian Pacific Railway Co [CPCPR.UL] said service disruptions could affect shippers across a number of industries as well as passenger and commuter rail service to major cities from Seattle to Washington, D.C.

At issue is a congressionally mandated deadline for railroads to implement positive train control, or PTC, an advanced safety technology that can prevent major accidents.

A six-year transportation bill approved by the Senate last month would allow the Obama administration to extend the deadline for up to three years. But the Senate measure is not expected to be taken up by the House of Representatives.

The three railroads have concluded they will not meet the deadline and may have to suspend service from Jan. 1 to avoid liabilities for operating outside federal law.

“The consequences for the economy and for our company would be substantial,” BNSF President and Chief Executive Officer Carl Ice said in his letter, which was sent to four Republican and Democratic committee members as well as U.S. Transportation Secretary Anthony Foxx and regulators.

BNSF, which is owned by billionaire investor Warren Buffett’s Berkshire Hathaway, needs to deploy PTC on about half its system, accounting for 80 percent of volume, Ice said.

Canadian Pacific and BNSF said they will have to begin notifying customers about their plans in the near future. BNSF said it is preparing notices to stakeholders including commuter services in Chicago, Seattle and Minnesota in the event that no extension is enacted by Oct. 31.

Norfolk Southern is considering “taking legal action to invalidate the deadline as a violation of due process,” the company’s president and chief executive, James Squires, wrote.

Canadian Pacific’s president and chief operating officer, Keith Creel, predicted congestion at “critical rail hubs” affecting service across the network if major lines are forced to shut down, prompting railroads and shippers to find alternate routes to move freight.